BofA shares drop to lowest level since March 2009

Redazione Reuters

3 IN. DI LETTURA

CHARLOTTE, North Carolina (Reuters) - Bank of America Corp (BAC.N) shares fell 5.2 percent Tuesday to their lowest level since March 2009 amid concerns about how a slowing world economy and the European debt crisis would affect the largest U.S. bank.

The sign of a Bank of America branch is pictured in downtown Los Angeles October 8, 2010. REUTERS/Fred Prouser

The bank’s shares have fallen much more than the broader sector for weeks amid fears it will face pressure to boost capital levels as the mortgage crisis wallops its balance sheet.

The bank has also faced a backlash over its plan to charge customers $5 per month for debit card use and continuing problems with its online banking web site.

“They are the No. 1 target,” said Frank Barkocy, director of research at Mendon Capital Advisors. “Everyone is beating the crap out of them, from Congress to regulators to the man on the street that sees them as the evil empire.”

Bank of America shares fell 29 cents to $5.24, their lowest level since March 2009. The shares have fallen for three straight sessions.

Bank of America was performing worse than the broader sector, which was down 1.2 percent on Tuesday. Shares of Citigroup Inc (C.N) and Morgan Stanley (MS.N), which have also dropped in recent sessions, fell 3.5 percent and 3.7 percent, respectively.

Since early August, bank stocks have fallen more than 25 percent, while Bank of America has dropped more than 45 percent.

On Tuesday Sen. Richard Durbin, the author of a law limiting bank debit card processing fees, criticized Bank of America for its plan to add a new monthly fee for debit card use. Barkocy called Durbin’s comments “inappropriate,” saying the bank has a right to make up lost revenue.

Meanwhile, Bank of America’s website carried a message Tuesday saying it was sorry the site was running slowly. Bank spokeswoman Tara Burke said the site was largely operating normally but the disclosure was posted as a precaution. The problems are not the result of hacking or malware, she said.

The bank told customers they could visit a branch or an automated teller machine instead of conducting business online.

The bank is due to post quarterly results on October 18. The report could be a catalyst for stabilizing its shares as well as the broader sector, Barkocy said.